3G war rages on, Vodafone cuts rates again in less than a month

KOLKATA: The price war in the third-generation, or 3G space, rages on with Vodafone India slashing price plans for a second time in less than a month on Tuesday. Its latest entry level plan offers 25MB of data downloads for Rs 25 while on the higher side, upto 12 GB of data downloads are available at a peak rental of Rs 1599.

The Indian arm of the British telco also claimed its new `pay as you go' (PAYG) price plan for prepaid users is the cheapest in the industry. At 2 paise/10 KB, it is an 80 per cent reduction from the existing rate of 10 paise/10 KB, making it a plan tailor-made for everyone".

"Our new PAYG price plan at 2 paise/10 KB is now the lowest in the industry, below the existing base rate of 3 paise/10 KB data plan," claimed a Vodafone India spokesman.

Last month, Vodafone had announced a mix of increased benefits and reduced rentals on data plans to remove imbalances between its 3G packs and its PAYG pricing. For instance, subscribers using the Rs 100 plan got a higher 300 MB data benefit instead of the earlier 200 MB. While heavy data users on the 1 GB and 2 GB plans saw their monthly rentals drop to Rs 250 and Rs 450 from Rs 375 and Rs 650 respectively.

But for usage levels beyond the stipulated data download quota on each plan, Vodafone India users will now pay Rs 2 paise/10 KB while there will be no additional charges for roaming.

"The new price plans, we believe, will induce people who shied away from 3G to experience the service without fear of a bill shock," said Vodafone India's chief commercial officer, Sanjoy Mukerji.

Over the past month, all leading telcos slashed 3G price plans to crank up market penetration and shore up revenue streams. Especially, since the actual number of 3G customers across the country remains at a shade over 20 million, effectively below 2% of the 900 million-plus pan-India GSM subscriber base.

Bharti Airtel had set the ball rolling by cutting 3G tariffs by upto 70 % for prepaid subscribers. Soon after, Idea, Vodafone, Rcom, Aircel and Tata Teleservices followed suit to bring in the volumes.

The continuing 3G price war comes even as telcos are up in arms over sector regulator Trai's recent recommendations on the airwaves auction and have warned that tariffs could surge by 100% if the government accepts its proposals. The industry move also counters joint efforts by all operators to raise voice tariffs over the last 12 months.

All mobile phone companies have raised voice call rates by 20-40% over the past year and further hikes are scheduled over the next couple of months.